Lords of Finance

The Bankers Who Broke the World

With penetrating insights for today, this vital history of the world economic collapse of the late 1920s offers unforgettable portraits of the four men whose personal and professional actions as heads of their respective central banks changed the course of the twentieth century

It is commonly believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person?s or government?s control. In fact, as Liaquat Ahamed reveals, it was the decisions taken by a small number of central bankers that were the primary cause of the economic meltdown, the effects of which set the stage for World War II and reverberated for decades.

In Lords of Finance, we meet the neurotic and enigmatic Montagu Norman of the Bank of England, the xenophobic and suspicious Émile Moreau of the Banque de France, the arrogant yet brilliant Hjalmar Schacht of the Reichsbank, and Benjamin Strong of the Federal Reserve Bank of New York, whose façade of energy and drive masked a deeply wounded and overburdened man. After the First World War, these central bankers attempted to reconstruct the world of international finance. Despite their differences, they were united by a common fear?that the greatest threat to capitalism was inflation? and by a common vision that the solution was to turn back the clock and return the world to the gold standard.

For a brief period in the mid-1920s they appeared to have succeeded. The world?s currencies were stabilized and capital began flowing freely across the globe. But beneath the veneer of boom-town prosperity, cracks started to appear in the financial system. The gold standard that all had believed would provide an umbrella of stability proved to be a straitjacket, and the world economy began that terrible downward spiral known as the Great Depression.

As yet another period of economic turmoil makes headlines today, the Great Depression and the year 1929 remain the benchmark for true financial mayhem. Offering a new understanding of the global nature of financial crises, Lords of Finance is a potent reminder of the enormous impact that the decisions of central bankers can have, of their fallibility, and of the terrible human consequences that can result when they are wrong.

Random House, Inc.Winner of the 2010 Pulitzer Prize

With penetrating insights for today, this vital history of the world economic collapse of the late 1920s offers unforgettable portraits of the four men whose personal and professional actions as heads of their respective central banks changed the course of the twentieth century

It is commonly believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person?s or government?s control. In fact, as Liaquat Ahamed reveals, it was the decisions taken by a small number of central bankers that were the primary cause of the economic meltdown, the effects of which set the stage for World War II and reverberated for decades.

In Lords of Finance, we meet the neurotic and enigmatic Montagu Norman of the Bank of England, the xenophobic and suspicious Émile Moreau of the Banque de France, the arrogant yet brilliant Hjalmar Schacht of the Reichsbank, and Benjamin Strong of the Federal Reserve Bank of New York, whose façade of energy and drive masked a deeply wounded and overburdened man. After the First World War, these central bankers attempted to reconstruct the world of international finance. Despite their differences, they were united by a common fear?that the greatest threat to capitalism was inflation? and by a common vision that the solution was to turn back the clock and return the world to the gold standard.

For a brief period in the mid-1920s they appeared to have succeeded. The world?s currencies were stabilized and capital began flowing freely across the globe. But beneath the veneer of boom-town prosperity, cracks started to appear in the financial system. The gold standard that all had believed would provide an umbrella of stability proved to be a straitjacket, and the world economy began that terrible downward spiral known as the Great Depression.

As yet another period of economic turmoil makes headlines today, the Great Depression and the year 1929 remain the benchmark for true financial mayhem. Offering a new understanding of the global nature of financial crises,Lords of Finance is a potent reminder of the enormous impact that the decisions of central bankers can have, of their fallibility, and of the terrible human consequences that can result when they are wrong.

Baker & TaylorArgues that the stock market crash of 1929 and subsequent Depression occurred as a result of poor decisions on the part of four central bankers who jointly attempted to reconstruct international finance by reinstating the gold standard.

Baker & TaylorArgues that the stock-market crash of 1929 and subsequent Depression era occurred as a result of poor decisions on the part of four bankers from England, France, New York, and Germany who jointly attempted to reconstruct international finance by reinstating the gold standard. 35,000 first printing.

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An astonishing book! It brings to light the intriguing, arcane and in some ways frightening world of sovereign wealth, the small group of men who control it and the geopolitical impact of the decisions they make. It became clear to me as I read that some of those men were clearly eccentric if not outright mad. Ahamed explores at some length the mystique of gold, along with its many pitfalls as an arbitrary and often distorted standard for measuring wealth. And adding to that aspect was the realization that economics remains to this day not a science (dismal or otherwise) but simply a collection of contradictory theories, most of which have failed when attempts were made to put them into practice.
The book also raises so many questions, not least of which was: Where on earth did Hitler find the enormous sums of money that enabled the Third Reich to build the largest and most advanced war machine of his day in a few short years, starting with a bankrupt and isolated country?
Reading W. L. Shirer's "Berlin Diary" and "Rise and Fall .." provides no enlightenment either. The usual opinion seems to be that Hitler financed his adventure by confiscating vast amounts of personal wealth, mostly from Jews and by looting the countries he invaded; but that seems hardly sufficient to cover the cost of armaments and munitions, let alone equipping paying and feeding gigantic numbers of men in arms.

I disagreed with the author on many points [really, Andrew Mellon's policies set in three administrations really screwed up everything, plus all that alcoholic beveridge monies [Prohibition] laundered through the NYSE, et cetera] but noted the author's background. Wasn't he at the World Bank w/Mrs. Michael Beschloss when she invested World Bank funds in the Carlyle Group, then got a job with them to manage said funds, and eventually founded the hedge fund, Rock Creek Group, which the author also belongs to?

jlazcan
Nov 11, 2011

This book is a little dry (so are many books dealing with History and Finance) and hard to follow because the author is rotating back and forth between countries and the players involved. It gives a detailed account of the lead-up and subsequent crash of the world economy. The author explains the market and political forces at work that helped to cause the implosion. This period is of particular importance and influenced the rest of the 20th Century as well as our current economy today. Finance and Economics will forever remember this period as a backdrop for testing theories in a real world setting.